E&E News (subscription req.) is reporting that the EPA—responding to a court order—has issued new regulations to reduce air pollution from petroleum refineries. But there’s a catch: EPA also has denied environmental groups’ request to regulate greenhouse gas emissions from the refineries, and in so doing, stands accused of dramatically reinterpreting the Clean Air Act:

EPA explained that it was working on a new global warming policy in response to last year’s loss in the Supreme Court in Massachusetts v. EPA—a case that started when the Bush administration denied a petition to regulate greenhouse gas emissions from cars and trucks.

The agency also opened itself up to controversy today by saying it did not need to set any greenhouse gas limits for the industry now because it previously had opted against establishing such standards.

Environmentalists said they plan to sue EPA in federal appeals court over that reasoning. "It’s enormous," said David Bookbinder, an attorney at the Sierra Club. "They’re taking the position the agency has no obligation to look at or review any other pollutant."

Bookbinder said he was not surprised by EPA’s decision, adding that he did not expect the issue to be resolved until after the Bush administration leaves office. "I don’t want these chuckleheads writing the regulations for CO2," he said. "What scares me is the chunk of collateral damage done to the Clean Air Act."

EPA’s response to the public comments, filed by the Sierra Club and the Environmental Integrity Project, is explained between pages 92 and 104 of the new rule. We’re first taking a close look at EPA’s wording ourselves, and will chime in with further comments as needed.

But as a matter of simple analysis, it does behoove us to note that this is farfrom first time that EPA has used its own unreasonable delay on the Supreme Court’s Mass. v. EPA mandate as an excuse…

One year ago today, the Supreme Court handed down an epochal decision in the global warming caseMassachusetts vs. the Environmental Protection Agency, stating that the EPA had the responsibility to determine how to regulate carbon dioxide for its contribution to global warming. The EPA, led by administrator Stephen L. Johnson, has utterly failed to do so, prompting a series of Congressional investigations and new lawsuits.

Johnson’s adversaries marked the anniversary of the Supreme Court decision today by continuing to press their case. Officials of 18 states filed suit against the EPA for its continued inaction—their petition “asks the U.S. Court of Appeals for the District of Columbia Circuit to require the EPA to act within 60 days.” By a unanimous vote, the House Global Warming Committee issued subpoenas “for EPA documents showing the Agency’s progress in making the ‘endangerment’ finding and proposing national emissions standards.”

The Supreme Court decision mandated that the EPA:

Declare whether greenhouse gases pose a threat to human health and need to be regulated;

Make a decision on California’s Clean Air Act petition to regulate motor vehicle greenhouse gas emissions;

Propose federal regulations for motor vehicle greenhouse emissions.

In the past year, EPA Administrator Stephen L. Johnson has only completed one of those tasks, by denying California’s waiver petition following the signing of the 2007 Energy Act in December.

Investigations by Congress, though repeatedly stymied by the agency, have determined that EPA staff actually worked vigorously last year to meet the Court mandate. In late fall Johnson brought the complete package with a health endangerment finding, approval of the California waiver, and motor vehicle regulations to the White House. After that, Johnson issued his waiver denial and all work at the EPA on the issue ceased. Henry Waxman, chair of the House Oversight Committee, has vigorously pursued documents related to the California waiver denial, even as the EPA responds to his subpoenas with document requests of their own.

On April 2, 2007, the Supreme Court handed down a watershed decision in the case of Massachusetts v. EPA. Despite promises from EPA Administrator Johnson and even President Bush himself, EPA has willfully chosen to ignore the Supreme Court’s instructions. Indeed, EPA has instead proposed action consistent with the wishes of polluters and other special interests.

The petitioners in Mass v. EPA have repeatedly and publicly warned EPA that continued inaction on the so-called “endangerment finding” and promised regulations for global warming emissions from vehicles would force the petitioners to take steps to compel action. EPA’s brazen refusal to act has left the petitioners no choice but to take the agency back to court to force it to comply with the High Court’s decision.

This press teleconference will review developments over the past year, outline the Bush administration’s broken promises relating to this case, and outline the legal action that the petitioners are being forced to take in order to prevent EPA from continuing to ignore the Supreme Court.

Innovest Strategic Value Advisors finds that Sunflower Electric Power Corporation, the company whose proposal was denied, failed to account for the effects of the likely regulation of carbon dioxide on the cost of coal-fired electricity when it sought to build two 700 MW coal plants in Holcomb, Kansas:

Innovest examined the economics of the transaction and determined that under the most plausible regulatory scenarios the decision to build new coal generating capacity will put Sunflower Electric’s ratepayers – who in this particular case are the actual owners – at significant risk. The report concludes that Sunflower’s management has not adequately addressed the competitive and financial risks associated with climate change in deciding to pursue the expansion of its Holcomb Station power plant.

Sunflower was remiss in not considering that federal legislation that places a price on carbon emissions is extremely likely, considering the bipartisan support and strong international pressure for such action.

In general, this analysis demonstrate that gas is the more financially sound choice for the construction of baseload generating capacity in all scenarios except 100% free allocation [to power companies] of carbon allowances.

This decision not only preserves Kansans’ health and upholds our moral obligation to be good stewards of this beautiful land, but will also enhance our prospects for strong and sustainable economic growth throughout our state. Instead of building two new coal plants, which would produce 11 million new tons of carbon dioxide each year, I support pursuing other, more promising energy and economic development alternatives.

Industry opposition to the Sebelius administration has been intense. Following the air permit denial, Peabody Energy, one of the largest coal companies in the world, funded newspaper ads attacking the natural gas industry. Sunflower Electric Power Corporation, the rate-payer-owned company making the bid for the new plants – offered a quid pro quo to Kansas State University, promising millions of dollars to fund energy research if the coal plants were approved.

(Cross-posted from Warming Law, which focuses on covering and analyzing the fight against global warming from a legal perspective.)

by Tim Dowling

“EPA Likely To Lose Suit.”

So said EPA, or at least EPA’s legal staff, when it briefed Administrator Johnson on the legal ramifications of a waiver denial. The quoted language comes from a powerpoint slide used during that briefing. As the Washington Postreports, Johnson’s waiver denial flew in the face of “the unanimous recommendation of the agency’s legal and technical staff.”

California’s legal challenge to the waiver denial will be filed in the U.S. Court of Appeals for the D.C. Circuit, and one large reason for believing EPA will lose can be found in the D.C. Circuit’s opinions in previous waiver cases. Unlike Administrator Johnson, the D.C. Circuit clearly recognizes the special, leading role California plays under the Clean Air Act with respect to controls on tailpipe emissions.

For example, in Motor & Equipment Mfrs. Ass’n v. Nichols, 142 F.3d 449, 543 (D.C. Cir. 1998), the D.C. Circuit ruled that waiver process is designed “to afford California the broadest possible discretion in selecting the best means to protect the health of its citizens and the public welfare.” (quoting the House Report).

Congress recognized that California was already the “lead[er] in the establishment of standards for regulation of automotive pollutant emissions” at a time when the federal government had yet to promulgate any regulations of its own. California’s Senator Murphy convinced his colleagues that the entire country would benefit from his state’s continuing its pioneering efforts, California serving as “a kind of laboratory for innovation.” This function was enhanced by the 1977 amendments, which permitted other states to “opt in” to the California standards by adopting identical standards as their own. Thus, motor vehicles must be either “federal cars” designed to meet the EPA’s standards or “California cars” designed to meet California’s standards. Rather than being faced with 51 different standards, as they had feared, or with only one, as they had sought, manufacturers must cope with two regulatory standards under the legislative compromise embodied in § 209(a). Id. at 1079-80 (citations and footnotes omitted).

The D.C. Circuit also examined the waiver process in Motor & Equipment Mfrs. Ass’n v. EPA, 627 F.2d 1095 (D.C. Cir. 1979), an unsuccessful industry challenge to EPA’s waiver grant for California rules concerning in-use maintenance of motor vehicles. Tracking the language of the statute, the court observed that EPA must grant a waiver request unless it makes one of the three findings set forth in Section 209(b)(1)(A)-(C). Id. at 1106. The issue is emphatically NOT whether the California rules are a good idea as a matter of policy, but whether EPA discharged its duties under the CAA. Id. at 1105.

Johnson’s bogus concern that a waiver grant here would create a “confusing patchwork” simply cannot be reconciled with the Clean Air Act and the applicable precedents that construe the waiver provisions in Section 209. Expect the D.C. Circuit to make short work of it.

Yesterday, you announced a decision to reject California’s efforts to reduce greenhouse gas emissions from automobiles. Prior to making this decision you assured the House Oversight and Government Reform Committee, as well as the state of Califomia and many others, that you would make this decision on the merits.

It does not appear that you fulfilled that commitment. Your decision appears to have
ignored the evidence before the agency and the requirements of the Clean Air Act. In fact, reports indicate that you overuled the unanimous recommendations of EPA’s legal and technical staffs in rejecting California’s petition.

Your decision not only has important consequences to our nation, but it raises serious
questions about the integrity of the decision-making process. Accordingly, the Committee has begun an investigation into this matter. To assist our Committee in this inquiry, I request that you provide us with all documents relating to the California waiver request, other than those that are available on the public record. This request includes all communications within the agency and all communications between the agency and persons outside the agency, including persons in the White House, related to the California waiver request. And all agency staff should be notified immediately to preserve all documents relating to the California waiver request.

You should produce to the Committee all responsive documents from your office by
January 10, 2008. All responsive documents from the Office of Transportation and Air Quality and the Office of General Counsel should be produced by January 17,2008, and all other responsive documents should be produced by January 23,2008.

EPA is not following science or the law . . . This decision is like pulling over the fire trucks on their way to the blaze . . . The Administration’s first bold act on global warming – and it’s to stop the states who are trying to do something about the problem. It is just plain shocking. . . New CAFE standards, if they go into effect, do not fully phase in until 2020. The California greenhouse gas limits will occur earlier – beginning in 2009 and fully phased in by 2016. With the mounting evidence of climate change impacts occurring now, it is imperative that we are take action immediately.

This rejection represents bald-faced political interference with California’s decades-long authority to enforce its own clean air rules . . . The California standards are the single most effective step yet taken in the United States to curb global warming. By blocking the California standards, the administration has stuck a thumb in the eye of 18 governors from both red and blue states who have led the way on global warming by adopting these landmark rules.

There is absolutely no reason for the Bush administration to block California’s effort to fight global warming. Today’s EPA decision is a major setback in the global warming fight and a slap in the face to all of the states that have moved forward when the federal government would not. This decision cements the United States’ reputation as the nation that is holding the rest of the world back at a time when our leadership is desperately needed. One can only hope that the next administration will play a more constructive role.

The EPA’s ruling is disgraceful. The Bush administration’s refusal to carry out the duties imposed on it by the Clean Air Act have polluted our air and water, further endangered the health of millions of Americans, and cost us precious time in our fight to address the looming threat of global warming. We can’t afford to delay strong steps to address global climate change. We will keep fighting to pressure this administration to do the right thing and allow states like Rhode Island to take action.

We commend EPA for protecting a national, 50-state program. Enhancing energy security and improving fuel economy are priorities to all automakers, but a patchwork quilt of inconsistent and competing fuel economy programs at the state level would only have created confusion, inefficiency, and uncertainty for automakers and consumers. . . Under the new national fuel economy law, automakers will make dramatic, 30-percent reductions in carbon dioxide.

Candidly I find this disgraceful. The passage of the Energy Bill does not give the EPA a green light to shirk its responsibility to protect the health and safety of the American people from air pollution.

While the federal energy bill is a good step toward reducing dependence on foreign oil, the President’s approval of it does not constitute grounds for denying our waiver. The energy bill does not reflect a vision, beyond 2020, to address climate change, while California’s vehicle greenhouse gas standards are part of a carefully designed, comprehensive program to fight climate change through 2050 . . . California sued to compel the agency to act on our waiver, and now we will sue to overturn today’s decision and allow Californians to protect our environment.

Sen. Barbara Boxer (D-Calif.), chair of the Committee on Environment and Public Works:

With Members of Congress leaving town, and with the news on global warming getting worse with each passing day, EPA Administrator Stephen Johnson has delivered the worst possible news to the good people of California and the 12 other states who have proven they are leaders in fighting for the survival of the planet.

It is ironic that this waiver denial comes during the season when we are supposed to work to make our country and the world a better place. And to hide behind the newly-passed Energy Bill as an excuse flies in the face of the Supreme Court’s findings and the Energy Bill itself.

This ill-advised denial turns its back on science, turns its back on fairness, turns its back on states’ rights, and turns its back on precedent.

I have informed the state of California that I am prepared to take all measures to overturn this harmful decision.

It is completely absurd to assert that California does not have a compelling need to fight global warming by curbing greenhouse gas emissions from cars. There is absolutely no legal justification for the Bush administration to deny this request – Governor Schwarzenegger and I are preparing to sue at the earliest possible moment.

EPA administrator Stephen Johnson’s denial of California’s petition to regulate tailpipe greenhouse gas emissions following the White House energy bill signing ceremony was deservedly front page news from coast to coast. The Supreme Court forced the EPA to consider California’s December 2005 Clean Air Act waiver request in April 2007 (Massachusetts v. EPA). In testimony before the Senate and the House earlier this year, Johnson signaled his lack of desire to grant the waiver. Now that decision has come in, with justifications even EPA’s own laywers and policy staff don’t believe. This is the first time in the history of the Clean Air Act that the EPA has denied a section 209 California waiver request.

[Ed.—Warming Law has superior analysis of the decision, from which I’ll steal some key insights.]

The EPA, which is yet to release the formal denial, announced in its press release that the increased CAFE standards in the new energy law to justify its denial of the California waiver:

EPA has determined that a unified federal standard of 35 miles per gallon will deliver significant reductions in greenhouse gas emissions from cars and trucks in all 50 states, which would be more effective than a partial state-by-state approach of 33.8 miles per gallon.

Warming Law says “EPA appears to be attempting to add a new test to the Clean Air Act” in requiring that California prove a local interest in addition to the “compelling” and “extraordinary” standards the Supreme Court said this problem meets.

Warming Law’s Tim Dowling notes that Johnson’s claim the waiver would create a “confusing patchwork of state rules” is typical industry rhetoric that is specious—only two sets of standards, national and California, would apply. “Johnson failed to explain how EPA has been able to grant EVERY other 209 waiver request in history without creating a confusing patchwork, but can’t do so here.”

Juliet Eilperin of the Washington Post reveals that Johnson overrode his staff.

In a PowerPoint presentation prepared for the administrator, aides wrote that if Johnson denied the waiver and California sued, “EPA likely to lose suit.”

If he allowed California to proceed and automakers sued, the staff wrote, “EPA is almost certain to win.”

The technical and legal staffs cautioned Johnson against blocking California’s tailpipe standards, the sources said, and recommended that he either grant the waiver or authorize it for a three-year period before reassessing it.

“Nobody told the administration they support [a denial], and it has the most significant legal challenges associated with it,” said one source, in an interview several hours before Johnson’s announcement, who spoke on the condition of anonymity because the official is not authorized to speak for the agency. “The most appropriate action is to approve the waiver.”